PM Browne Says Consumers Would Pay for Higher Fuel Margins as Operators Warn of Threat to Jobs

Prime Minister Gaston Browne says any increase in the profit margin sought by gasoline retailers would be paid by consumers at the pumps, not from government coffers, as service station closures affected hundreds of motorists on Wednesday.

In a series of posts on his personal Facebook page, Browne said the government had asked dealers to wait until December for an adjustment. He argued that any increase must be scientifically determined rather than arbitrarily implemented to avoid inflationary pressures that could undermine economic growth.

The prime minister, who also holds the finance portfolio, maintained that the government had not reneged on its agreement with the operators and described the closure of several service stations nationwide as unjustifiable.

Wednesday’s shutdown left motorists dependent on West Indies Oil Company (WIOC) stations, the only outlets that remained open. Some temporarily ran out of gasoline, leaving many drivers unable to fill their tanks.

Browne assured the public that operating WIOC stations would remain open late into the night to meet demand. He also warned “bandits” that officers from the police Special Service Unit had been deployed to provide security at the stations.

However, service station operators have outlined a different picture of the dispute, warning in an open letter that their shrinking margins threaten both continued operations and jobs.

They said they approached Browne in March seeking an increase when their margin stood at approximately eight per cent. According to the operators, that figure subsequently fell to seven per cent and now stands at 6.38 per cent.

They argued that higher fuel prices require them to spend more purchasing stock from WIOC without a corresponding increase in their earnings per gallon. The letter puts their margin at $1.08 per gallon for gasoline and 95 cents for diesel.

The operators also said repeated price increases since the end of August had worsened their financial position and increased their daily safety risks.

They pointed to a Ministry of Finance letter dated March 28, 2003, which they said communicated Cabinet’s approval of a floating margin for fuel dealers. WIOC, they added, had been copied on that correspondence.

“We are not asking for anything new. We are asking that what was agreed, be implemented,” the operators wrote.

They also questioned the pace of the government’s response, saying they had received no communication since their September 1 meeting with Browne.

The operators argued that waiting for ideal economic conditions was unreasonable because challenges would always arise. They compared their position with price-controlled supermarket goods, which they said receive a 15 per cent gross markup.

Their letter warned that continued pressure on margins could force changes to the service station industry, including a move towards self-service, with implications for employment.

“If you, sir, as Minister of Finance, continue to worsen our margin, we will be unable to continue operations as is,” they stated.

The operators are calling for the immediate establishment of a promised review committee and completion of its work within the agreed 90-day timeframe.

As the dispute continues, Wednesday’s closures demonstrated the impact on motorists, with limited access to fuel compounded by temporary shortages at some of the stations that remained open.